Interest rate hits 'shock' 5% after 0.5 percentage point increase

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The Bank of England has shocked economists and investors by raising interest rates half a percentage point to 5% - the highest level since 2008.

Economists had expected the Monetary Policy Committee to raise interest rates by only a quarter percentage point, but the MPC voted 7-2 for the surprise increase, explaining that it was aiming to bring higher-than-expected inflation under control and indicated concern about high wage increases and company profit margins.

It comes after the UK's official inflation rate failed to fall as expected in May, staying at 8.7% - well above the bank's 2% target.

Read more here: https://news.sky.com/story/interest-rate-hits-5-after-half-percentage-point-increase-12907372

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